Comment by barney54 | Hacker News Reader

Comment by barney54 | Hacker News Reader

The title of the article is incorrect. The oil companies do not get $4B a year of taxpayers' money. This isn't a transfer of money to the oil companies, this is about tax credits and tax deductions, specifically--percentage depletion, intangible drilling costs, and the manufacturing deduction.

Here's the actual article: http://i.cfr.org/content/publications/attachments/Discussion...

A few more notes. The major oil companies cannot take full advantage of percentage depletion or intangible drilling costs, only smaller companies.

The manufacturing deduction is available to all US manufacturers. If we get rid of this deduction for oil companies, we should do the same for all manufacturers.

An alternative perspective is that these tax preferences are similar to the tax preferences all businesses receive (ie. being able to deduct certain expensive, etc.). We should reform the tax code, but do so for all businesses. More here: http://instituteforenergyresearch.org/analysis/the-obama-adm...

You went from stating the article is wrong, to saying that only smaller companies can take advantage of tax credits, threw in a red herring about all manufacturing companies, and then wrapped up with reforming the tax code.

The mental gymnastics here are stunning, and to claim tax credits and deductions aren't a direct transfer of money is like saying a credit card payment isn't, since it involves an intermediary clearing step.

At the end of the day, this IS a direct transfer of money to an industry that not only doesn't need it, but needs to be TAXED out the a-- to prevent further destruction of people's well-being.

No it is not a direct transfer. This is not talking about a transfer from taxpayers to oil companies. It's about companies keeping money they made instead of paying that money in taxes.

Disparity in tax payments is a form wealth transfer, though I will agree it's not physical. The fact that it is not a physical transfer of funds is a sleight of hand.

Edit: spelling.

Also...

https://www.google.com/search?q=subsidy&ie=utf-8&oe=utf-8

sub·si·dy -- noun: subsidy; plural noun: subsidies

1. a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.

--and--

https://www.google.com/search?q=subsidy&ie=utf-8&oe=utf-8#q=...

sub·si·dy --

late Middle English: from Anglo-Norman French subsidie, from Latin subsidium ‘assistance.’

Money is fungible so Tax credits are identical to directly handing money. Is this a good reason to directly hand them money Y/N is a separate question, but we do hand them money.

I'm not sure I agree with that in the general case. If the government lowers the top tax rate, is it "handing you money?" I can see that concept being true for targeted tax breaks to specific companies.

If they don't lower spending then they are borrowing to make up the difference, so it's handing money to people today at the cost of taking it from a slightly different group in the future.

There is a sense in which a tax credit is "identical" to handing over cash directly. But in a very similar sense, that tax credit is identical to a tax cut, and a tax cut is identical to the absence of a tax raise. Would it be accurate to say that your income tax not being sharply increased next year is "identical" to being handed a large pile of cash? Is every dollar that you are not taxed actually a gift from the government?

Or to flip it around: If we decide collectively that the correct tax rate for some activity is 20%, then that's the correct rate. Just because you might feel a better rate would be 30% (or 10%) doesn't mean that we're actually gifting the entity 10% of the revenue (or stealing 10% of their revenue). Similarly, there's no objectively correct answer to how large pieces of industrial plant should be depreciated beyond the accounting rules that Congress, the IRS, FASB, etc., have enacted. Those rules not matching what you or I would have chosen doesn't mean they're either a gift nor theft.

> a tax cut is identical to the absence of a tax raise

Wat?

Assume I earn $100 and tax is 30%: I pay $30.

Tax gets cut to 20%: I pay $20.

Tax doesn't rise: I pay $30.

30 != 20. A tax cut is a tax cut, "absence of raise" is a different thing.

> Those rules not matching what you or I would have chosen doesn't mean they're either a gift nor theft.

It doesn't mean they're not a gift either. Those rules are the result of a complex set of factors including campaign contributions, lobbying, revolving-door promises and occasional outright bribes. They are not Holy Scripture and everyone is entitled to criticise them, which includes defining this or that break with words like "gifts", "giveaways", "pork" and so on.

That's arguable only if tax rates are universal. People pretend a lower long term capital gains rate is a tax cut, but it's effectivly just handing money to a few at the cost of everyone else who needs to fund the government.

In the end spending cuts matter, tax cuts are just smoke a mirrors to mask spending as a good thing.

I always thought the exploration & production operations were natural resource groups, and the refineries & chemical plants were the manufacturing area.

'All money is money' 50 cent

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